Zaborowski v. Hoffman Rosner Corp.

• Decision Date: 21 October 1976
• Docket Number: No. 75--510,75--510
• Parties: , 1 Ill.Dec. 465 Michael E. ZABOROWSKI et al., Plaintiffs-Appellants, v. HOFFMAN ROSNER CORPORATION, a Foreign Corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 653

356 N.E.2d 653

43 Ill.App.3d 21, 1 Ill.Dec. 465

Michael E. ZABOROWSKI et al., Plaintiffs-Appellants, v. HOFFMAN ROSNER CORPORATION, a Foreign Corporation, Defendant-Appellee.

No. 75--510.

Appellate Court of Illinois, Second District, First Division.

Oct. 21, 1976.

Thomas F. Howard, Bloomingdale, Hubert J. Loftus, Addison, for plaintiffs-appellants.

Demling & Jegen, John Demling and Bruce A. McLennan, Glen Ellyn, for defendant-appellee.

SEIDENFELD, Justice:

Plaintiffs, who are various owners of residences purchased from the defendant land developer corporation in the Village of Bloomingdale, filed suit based on alleged fraud and deceit to enjoin defendant from developing its remaining property across the street for other than single family purposes. Alternatively they sought damages from any other zoning classification.

Plaintiffs' complaint is based upon a claim that defendant fraudulently represented to them that the property west of Bloomingdale Road would be developed as a single family subdivision but that subsequently defendant petitioned the village board of Glendale Heights for annexation and reclassification of zoning for the property west of Bloomingdale Road. They allege that the zoning sought would damage the existing single family character of the area and affect the quality of light and air presently enjoyed by the plaintiffs. Upon defendant's motion the complaint was dismissed for failure to state a cause of action. Plaintiffs appeal from the order of dismissal which was made final by the trial court.

Defendant's motion to dismiss alleges that the complaint fails to state a cause of action because it refers to inquiries made prior to the execution of the contracts of purchase, states a representation of future intention, does not describe the property west of Bloomingdale Road referred to; and that the purchase agreements provide that the contract constitutes the entire agreement with no representations, warranties, undertakings or promises, implied or otherwise having been made either by the seller or purchaser unless stated in the contract.

The homeowners contend that they have properly pleaded all of the elements necessary to state a cause of action for fraud and deceit based upon a false representation of future conduct which they argue was part of the scheme used to accomplish the fraud; and that in any event since it does not clearly appear that no set of facts could be proved under the pleading which would entitle them to relief, the court erred in dismissing the complaint.

It has been clearly established that the elements of an action for fraud and deceit include a statement of a material fact, made for the purpose of inducing the other party to act; know to be false by the maker, not know to be false by the other party but reasonably believed to be true, and upon which he relies and acts to his damage. (Roda v. Berko, 401 Ill. 335, 340, 81 N.E.2d 912 (1948); see also Davis v. Nehf, 14 Ill.App.3d 318, 325, 302 N.E.2d 382 (1973); Welch v. Brunswick Corp., 10 Ill.App.3d 693, 698, 294 N.E.2d 729 (1973); Broberg v. Mann, 66 Ill.App.2d 134, 139, 213 N.E.2d 89 (1965); Polivka v. Worth Dairy, Inc., 26 Ill.App.3d 961, 966, 328 N.E.2d 350 (1974).) It also has been well established in Illinois that a promise to perform an act even though the party intends at the time he makes the promise not to perform is an insufficient false representation to constitute fraud. (Roda v. Berko, 401 Ill. 335, supra, at 340, 81 N.E.2d 912.) A rationale of the rule is that in order to constitute fraud the representation must be an affirmance of fact and not a mere promise or expression of opinion or intention; or in other words 'the fraud must be in the original contract or transaction, and not in its nonfulfillment.' (Luttrell v. Wyatt, 305 Ill. 274, 281, 137 N.E. 95, 97 (1922). Hayes v. Disque, 401 Ill. 479, 488, 82 N.E.2d 350 (1948).) However, an exception is stated in Roda v. Berko, 401 Ill. at page 340, 81 N.E.2d at page 915:

'* * * in cases where the false promise or representation of intention or of future conduct is the scheme or device to accomplish the fraud and thereby cheat and defraud another of his property, equity will right the wrong by restoring the parties to the positions they occupied before the fraud was committed. * * *'

See also Willis v. Atkins, 412 Ill. 245, 260, 106 N.E.2d 370 (1952); Carroll v. First National Bank of Lincolnwood, 413 F.2d 353, 358 (7th Cir. 1969).

The alleged misrepresentation of fact pleaded in the complaint before us is:

'5. That to induce plaintiffs to enter into said contract, defendant falsely and fraudulently represented to plaintiffs that the property west of Bloomingdale Road would be developed into a 200 home single family subdivision.'

Defendant argues that the complaint fails to allege that the representation that the property west of Bloomingdale Road 'would be developed' into a single family subdivision was false when made or that the defendant salesman who made the statement knew or believed it to be false when made. Defendant also argues that the plaintiffs have not pleaded any facts which show that they had a right to rely on the representation since it could only amount to an oral covenant to develop land, unenforceable under the statute of frauds and relating to the legislative function of zoning.

Neither a 'prophecy of future developments' nor a representation 'merely boosting the property' relating to what will happen in the future amount to actionable fraud. (Cf. Owens v. Union Bank of Chicago, 260 Ill.App. 595, 602 (1931).) Plaintiffs contend, however, that the representation of a matter of future intention as to which the party making the promise has 'special knowledge, expertise, and inside information' is actionable as fraud. Owens v. Union Bank of Chicago, supra, has been cited by plaintiffs as illustrative of this exception to the general rule that promises...